Funding for Bus Franchising

1. Questions to the Cabinet Secretary for Finance, Constitution and Cabinet Office – in the Senedd at on 15 May 2024.

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Photo of Llyr Gruffydd Llyr Gruffydd Plaid Cymru

(Translated)

4. What discussions has the Cabinet Secretary had with the Cabinet Secretary for North Wales and Transport regarding additional funding for bus franchising? OQ61110

Photo of Rebecca Evans Rebecca Evans Labour 1:59, 15 May 2024

Decisions about the funding available for bus franchising will be a matter for the budget-setting process in the appropriate years, noting the challenging fiscal outlook that we're facing.

Photo of Llyr Gruffydd Llyr Gruffydd Plaid Cymru

Many of us in north Wales look jealously at the investment going into the south Wales metro, the £1 billion plus upgrade of services, which, of course, is welcome, but, by contrast, we have a rather ambiguous candy floss concoction that's been branded a north Wales metro that merely links up existing rail and bus services. Bus services, as we know, have long been a poor relative of rail, with services in decline since before COVID, actually. I welcome Government proposals around bus franchising and ending the grip that private bus firms have on those services, but for it to work properly, it obviously has to be funded properly. So, can you assure us today that you will be investing more money in bus services to ensure that the proposed bus legislation is as effective as we all hope it to be? And can you also assure us that north Wales will get its fair slice of the cake?

Photo of Rebecca Evans Rebecca Evans Labour 2:00, 15 May 2024

I can't say anything about the budgets for the years that we don't have a settlement for at this point. I think something that needs to be recognised is that we provide significant funding already to support bus services across Wales. But what franchising will allow us to do is to make better use of the funding that we provide and give us more control over the risk and also the power to control the funding that we invest, making sure that it can be spent where it has the greatest impact, reducing inefficiency and improving the integration of the services to make that funding go as far as possible. You will, I'm sure, be very familiar with the bus reform road map that was published; that really does, I think, recognise that future funding will be challenging, so it matters how we spend the limited resources that we have.

Unfortunately, I'm not able to say more in terms of the future funding for the bus franchising, purely because we haven't yet had those discussions, we haven't yet had our settlement from the UK Government. We haven't entered into a spending review period of that sort yet. But we absolutely will be considering the importance of bus services, as we enter those discussions.

Photo of Janet Finch-Saunders Janet Finch-Saunders Conservative 2:01, 15 May 2024

North Wales relies on buses, certainly in Aberconwy, they do—one in five households do not have access to a car, with four in every five bus users not having access. Clearly, maintaining our bus system is crucial. However, I am concerned about the financials for the franchising model, which, I know, are still under development, and, indeed, we took evidence last week in our climate change committee. Indeed, there are suggestions that London-style franchising will cost at least £300 million a year. You propose to adopt an incentive-based gross cost model, for which Transport for Wales will pay operators a fixed sum to run specific services, and this will keep the revenue in-house. However, it will also mean that TfW is obliged to run services that are at risk of decreasing passenger numbers and thus fund non-financially viable services. 

Now, TfW is known well to this Chamber for its performance in the rail system. As the chief executive of TfW, James Price, has outlined, future funding will be a challenge. Now, again, last week, as we were in the climate change committee with those actually working on the franchise model in England, several concerns were raised as to whether TfW even has the capacity, the resources or the ability to carry out the franchising model in Wales, but also within the timescales set. So, how will you, Minister, work with Transport for Wales to ensure that it does have the resources to make the franchise scheme a success? And what additional funding are you planning to transfer in order to ensure that this is not a failed exercise? Diolch.

Photo of Rebecca Evans Rebecca Evans Labour 2:03, 15 May 2024

The first thing to say is that we haven't yet developed the contracts that we will use for the franchising, but our existing contracts for TrawsCymru services will be used as a starting point because they have, already, some of the features that we would expect to see in franchising contracts. This work is being led by the Cabinet Secretary for transport, so he would be much better placed to provide you with detailed answers. But on the financing of it, as I said in my previous answer, we don't yet have budgets for these financial years, so I'm not able to provide any level of certainty to colleagues at this point. But I know, when it does come to the point of scrutinising the budget for those years, this will be a focus for colleagues.